PayPal rebrands, touting mobile payment abilities

PayPal has unveiled a new global branding campaign designed to put greater focus on its ability to let people make payments for goods and services anywhere and anytime.

The rebranding comes as the company has grown to have some148 million active PayPal accounts and has taken on a broad-ranging approach to new mobile payment technologies. The moves have led some analysts to conclude that PayPal faces a promising 2014 and beyond.

Yet -- as with many technologies -- Apple could spoil all that potential.

"PayPal is already successful in the payments business and has the best chance of figuring out a convenient mobile payment model that consumers and merchants actually want to use," said Avivah Litan, an analyst at Gartner.

Jordan McKee, an analyst at Yankee Group, called PayPay "forward thinking" with promising leadership from CEO David Marcus. Citing its 148 million active customers, McKee said "no other mobile wallet player can boast those numbers or even come close."

A Yankee Group survey shows that 15% of U.S. mobile device owners have used a PayPal app recently, which trumps any other mobile wallet by fourfold.

PayPal already puts a strong emphasis on mobile payments, made possible with the PayPal App for consumers that can be downloaded for iOS, Android and Windows Phone. About 1.9 million merchants worldwide allow use of the app in their stores, where customers activate a PayPal account via the mobile app over a wireless connection. The account is then verified by a clerk through an in-store terminal.

With PayPal Here, the company offers an outreach to help businesses -- small and large -- accept payments using a mobile device and a small triangular magnetic credit card reader that attaches to the mobile device. The technology isn't much different from the card reader from Square.

PayPal has also announced plans to help merchants accept payments with a barcode shown on a phone, or from a customer inputing a 4-digit PIN in a payment terminal in the store.

The branding campaign announced Wednesday is PayPal's first since 2007. It will rely on the slogan, "Powering the People Economy," in print, digital and TV advertisements. The first TV spots will be shown in the U.S., Germany, the U.K. and Australia.

A new PayPal logo incorporates the double "P" of the previous logo, but now overlaps the two P's and uses more vibrant blue colors and a slightly different font. A YouTube video describes the branding update.

Earlier this week, PayPal parent eBay disclosed in its first quarter earnings report that PayPal has 148 million active accounts, up 16% from the previous quarter. While impressive, the total lags far behind the 800 million Apple iTunes accounts that Apple could potentially use for payments with its Passport app or other means.

On its Web site, PayPal says it processed $20 billion in mobile payments in 2013, though some analysts have put the mobile payments processed for last year at up to $27 billion.

PayPal accounted for about $1.85 billion in eBay revenue for the first quarter, or 43% of the total.

Ovum analyst Eden Zoller said PayPal has been quick to embrace promising new technologies -- wearable devices, biometrics and even Bluetooth Low Energy with beacons -- for m-payment initiatives.

By comparison, Apple has already taken steps with it iBeacon technology to potentially tie purchases from smartphones to beacons in stores over Bluetooth Low Energy. Zoller predicted Apple "will make an explicit move into m-payments this year" but didn't elaborate.

On the other hand, Litan said that "Apple hasn't made any noticeable forays into the mobile payment market, and I doubt they will anymore. They seem to be sticking to devices and consumer services and have no clear incentive to get into payments at this stage."

Litan may be in the minority with regards to Apple's intentions. She was just one of four analysts interviewed who doubted that Apple would expand its mobile payments efforts.

Two mobile payment services -- Isis and Google Wallet -- that rely on NFC technology in smartphones are likely to "stay dormant" in 2014, Litan said. "I don't see any visible signs that the market is dying to have these types of solutions."

There are many other challengers that PayPal will confront, despite the virtues of its updated brand and recent growth. "The challenge for PayPal's mobile first ambition is that a multitude of other players have exactly the same goal for m-commerce, including Facebook," Zoller said.

Jack Gold, an analyst at J. Gold Associates, called the mobile payments market "highly fragmented," a condition that will remain so for the foreseeable future in the U.S. "There is plenty of room for competition. When -- not if -- Apple gets serious about mobile payments, they will be a force to be reckoned with."

As in the past few years, Gold said consumers in the U.S. still don't see mobile payments as a necessity, or even highly desirable. Credit and debit cards, and even cash, are still much easier for most Americans to use.

PayPal's success beyond 2014 could be highly dependent on Apple's moves. "We will see something on mobile payments from Apple in the not too distant future," McKee predicted.

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